The party is over – although for many it hardly got going. With interest rates set to rise and the Bank of England ready to get tough on mortgage lending, the housing bubble may be about to burst.

Chancellor George Osborne and Bank of England Governor Mark Carney last week did their best to throw a bucket of cold water on house prices.

Osborne pledged to relax planning restrictions to encourage a housebuilding boom in London – the theory being that the more homes there are the less pressure on prices – while Carney hinted at interest rate rises, saying he was concerned at rising household debt levels.

Fear: Mark Carney, left and George Osborne, far left, want to cool the housing market

Crucially, both hinted at restrictions to the size of mortgages relative to borrowers’ incomes – perhaps to a maximum of three and a half times salary.

The Bank of England’s Financial Policy Committee meets on Tuesday and could even recommend that the clampdown starts immediately. But experts are sceptical.

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‘I don’t think we will see any of these controls before the General Election,’ said Ray Boulger at broker John Charcol. The Election is expected in May 2015.

That may be disappointing for those who think the measure could at a stroke cut house prices to more affordable levels, but a relief for those hoping to take out a big loan to get on the property ladder. Boulger said: ‘It would hurt first-time buyers more than anybody else.’

The Chancellor has been at pains to encourage lending to first-time buyers, so any move would be politically surprising. Indeed, former Governor Sir Mervyn King did not want the Bank to be given the powers it now has to restrict lending, conscious that their use could be a political minefield.

The comments by Osborne and Carney came amid widening concern about rising property prices. The International Monetary Fund warned last week that it thought UK house prices were 27 per cent too high relative to incomes, and 38 per cent too high relative to rent. Business Secretary Vince Cable has urged restrictions to borrowing to prevent people taking out loans of up to five times their salary.

Housing experts have questioned the wisdom of restrictions, especially given the Financial Conduct Authority has only just introduced new rules for more rigorous affordability tests on mortgages.

Brian Murphy, head of lending at broker the Mortgage Advice Bureau, said: ‘The introduction of the Mortgage Market Review (MMR) was the result of several years of planning which sought to do away with crude measures and put in place thorough affordability tests that absolutely ensure lending is measured, sustainable and closely calculated on affordability. Osborne’s latest announcement suggests MMR has totally bypassed politicians.’

Crackdown: Mortgage lending criteria is set to become more stringent

The MMR rules, introduced in April, ensure lenders have to ask borrowers detailed questions on their monthly spending, down to how much they pay for a haircut.

If Osborne seems not to be aware of these rules, those on the Financial Policy Committee will be, as one of the ten members is Martin Wheatley, head of the FCA.

The Committee is unlikely to introduce crude restrictions, either on incomes or on specific postcodes where prices have risen. But it could seek to tighten rules on affordability by tweaking the MMR, sources say. Banking sources also suggest there is concern about long-term loans of 35 and 40-year durations, which have soared in popularity since the turn of the century as interest-only loans fell out of fashion. The conundrum for regulators is that while prices have rocketed in London, prices in many parts of the country remain below 2007 levels. There is growing evidence too that the London housing market is beginning to cool.

The chart shows the annual change in the average house price, analysed by region

Twelve London boroughs saw price falls in April compared with the previous month. Over the year they were up in the capital by 13.3 per cent, but those surges may be coming to an end. Osborne was at pains last week to point out that immediate action may not be necessary. ‘Does the housing market pose an immediate threat to financial stability today? No, it doesn’t. Could it in the future? Yes, it could,’ he told diners at the Mansion House.

Ultimately, the level of interest rates looks likely to have the final say in whether lending soars to unaffordable levels.

The Governor gave a strong hint last week that a quarter point rate rise will come in the autumn, rather than early in 2015, saying that rates will rise ‘sooner than markets expect’.

Homeowners are likely to rush to remortgage as a result, experts say, to fix their rates at current low levels.

Those with loans worth more than three and a half times their income, who could be prevented from remortgaging under strict loan-to-income rules, might have to hurry.

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Hurry, hurry, hurry before the great mortgage clampdown: First-time buyers who need large loans only have a few months to act